Kik, a chat app popular with teens, raised almost $100 million by selling its own cryptocurrency during an initial coin offering, or token sale, the company announced on Tuesday.
According to a Kik blog post, the company sold Kin, Kik's cryptocurrency based on the Ethereum blockchain, to 10,000 people from 117 countries. TechCrunch reports that Kik users bought $47.5 million worth of Kin, which is tied to Ethereum's price, currently around $282. Back in August, Kik closed a presale round of $50 million to investors, including Blockchain Capital, Pantera Capital, and Polychain Capital, which brings the total amount raised through the token sale to $97.5 million.
Kin, according to CEO Ted Livingston, who wrote about Kik's move into cryptocurrency in a post on Medium, will be the default currency inside Kik. "By integrating Kin into our chat app Kik, we hope to spark the creation of a new ecosystem of digital services that is open, sustainable, and compelling," says Livingston. The company, which is based in Ontario, wants to build an economy inside the app based on "buying and selling stickers, hosting and joining group chats, creating and using bots, and much more."
Kik, which is backed by China's Tencent, says that it hopes to build an ecosystem similar to China's mega-popular chat and payment app WeChat. Users can pay at restaurants using WeChat, a function known as "social commerce."
Companies are using ICOs to raise money without giving away equity or registering with the Securities and Exchange Commission. Startups are excited about the unregulated ICO space, although ICOs pose major risks to investors. In Q2 2017 alone, startups raised nearly $800 million through ICOs, according to a report from CoinDesk, a cryptocurrency news site.
Kik initially set out to raise $125 million, but it set limits to the number of tokens each user could buy.